The United Parcel Service (UPS) said late last week that its investment in people and infrastructure designed to make sure that delivery problems that plagued its customers during the 2013 holidays were not repeated in 2014 cost it so much money that it was reducing its earnings estimates for the fourth quarter and entire fiscal year.
The company has said that it spent millions to improve its shipping capacity late last year.
The company has said that it spent millions to improve its shipping capacity late last year.
- KC's View:
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Here's a fact of life about e-commerce. The more people order products online, the greater the infrastructure it will take to deliver those items, which means it will require more investment by shipping companies and higher charges to consumers. If e-tailers decide to offer free shipping, as so many have, those costs will have to be applied somewhere.
None of this makes me less enthusiastic about c-commerce. But it does cost money, and, as I've always suggested, the main lure can't just be price. Because all this stuff costs money.
